ALERT: CMS 1633-F 2016 OPPS Final Rule

On Friday, October 30, 2015  CMS released a Fact Sheet and response to comments related to the changes to the Two Midnight Rule reflected in the 2016 Hospital Outpatient Prospective Payment System Final Rule (“OPPS Final Rule.”)   The OPPS Final Rule is scheduled to appear in the November 13 federal register.  CMS explicitly notes that it is not changing its policy with respect to hospital stays meeting the two midnight benchmark  where the “patient is reasonably expected to stay at least two midnights, and where the medical record supports the expectation that the patient would stay at least two midnights.” The OPPS Final Rule expands Part A for cases that do not meet the benchmark to provide that Part A payment may be permitted on a case-by-case basis for inpatient admissions that do not satisfy the 2-midnight benchmark if “the documentation in the medical record supports the admitting physician’s determination that the patient requires inpatient hospital care despite an expected length of stay that is less than 2 midnights.”

What documentation is required to support inpatient status?  CMS notes that the physician’s judgment is based on criteria previously appearing in CMS directives (including those related to the benchmark) such as

  • The severity of the signs and symptoms exhibited by the patient;
  • The medical predictability of something adverse happening to the patient; and
  • The need for diagnostic studies that appropriately are outpatient services (that is, their performance does not ordinarily require the patient to remain at the hospital for 24 hours or more).“…we note that while we do not refer to “level of care” in guidance regarding hospital inpatient admission decisions, but, rather, have consistently provided physicians with the aforementioned time-based guidelines regarding when an inpatient hospital admission is payable under Part A, we do note that, by definition, there are differences between observation services furnished in the outpatient setting and services furnished to hospital inpatients.  Specifically, observation services, as defined in Section 290 of Chapter 4 of the Medicare Claims Processing Manual are well-defined set of specific, clinically appropriate services, which include ongoing short-term treatment, assessment, and reassessment, that are furnished while a decision is being made, regarding whether patients will require further treatment as hospital inpatients or if they are able to be discharged from the hospital (emphasis added, p. 968, CMS-1633-FC/1607-F2).”    In previous communication CMS has explicitly noted that there is no distinction between inpatient services and outpatient services, and thus, the return to circular logic that outpatient services are those rendered on an outpatient basis is not only troubling for facilities trying to ensure that appropriate status decisions are made, the language also is troubling because it would appear to provide auditors with tools to deny inpatient stays based on the intensity of service.MedManagement will continue to provide updates as sub regulatory guidance is released, and as we have done in the past, MedManagement will be reaching out over the next few weeks to address client specific issues.  In the interim, do not hesitate to contact me if I can be of assistance.Joan Ragsdale, J. D. Chief Executive Officer MedManagement LLC 205-970-8804
  • The CMS fact sheet can be viewed here.
  • CMS notes in the final rule that the use of Beneficiary and Family Centered Care Quality Improvement Organizations (QIOs) is designed to provide greater collaboration and education with providers. The QIOs began reviews of short inpatient hospital stays October 1, 2015 and will review short stays not meeting the two midnight benchmark on a case by case basis to determine if a case meets the new exception for cases not meeting the benchmark beginning January 1, 2016.   CMS declined the adoption of an evidence based standard for clinical reviewers and noted that the technical requirements for medical reviewers will be released in sub regulatory guidance not later than December 31, 2015. When the QIO denies a claim, the QIO will give the provider claim specific information and an opportunity to talk with a QIO clinician knowledgeable about the reviewed claims.  After the discussion, the QIO will provide a final results letter to the provider, will refer any denied claims to the MAC for payment adjustment and may make referrals to the Recovery Auditors for additional auditing.  CMS also noted several changes that have been made or are being made to the Recovery Auditor program, including limiting the look-back period for patient status reviews to 6 months.
  • In the commentary, CMS references the provision in Section 10, Chapter 1 of  Medicare Benefit Policy Manual which provides that when a beneficiary receives a minor surgical procedure or other treatment in the hospital that is expected to keep him or her in the hospital for only a few hours (less than 24), the services should generally be billed as outpatient services and notes “Accordingly, we would expect it to be rare and unusual for a beneficiary to require inpatient hospital admission after having a minor surgical or other treatment in the hospital that is expected to keep him or her in the hospital for only a few hours and not at least overnight ( emphasis added, p. 957 of the commentary CMS-1633-FC/1607-F2).”   Several references are made to the 24 hour/overnight standard that was in place prior to the adoption of the  two midnight rule.  When specifically asked whether the new case by case analysis was a return to the “level of care approach” for status analysis, CMS noted as follows: